EANS-Adhoc: Market recovery and new ramp-ups contribute to 41% growth in ElringKlinger sales during first quarter of 2010

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ad-hoc disclosure pursuant to section 15 of the WpHG transmitted by euro
adhoc with the aim of a Europe-wide distribution. The issuer is solely
responsible for the content of this announcement.
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3-month report

10.05.2010

Dettingen/Erms, May 10, 2010 +++ The ElringKlinger Group
propelled its consolidated sales by 40.9% to EUR 182.7 (129.7)
million in the first quarter of 2010. The company benefited from
the global recovery of automobile markets as well as its strong
positioning in Asia and new product ramp-ups. Profiting from cost
streamlining and improved capacity utilization in production, the
Group's operating result rose to EUR 23.4 (3.7) million, a more
than sixfold increase compared to the same quarter a year ago,
which had been severely impacted by the market crisis. The Group
posted net income, after minority interests, of EUR 13.6 (2.0)
million.

Despite the continued weakness within the truck market, the
Original Equipment segment, which encompasses business activities
with vehicle manufacturers, was able to drive sales revenue
forward by 56.2% to EUR 136.4 (87.3) million in the first quarter
of 2010. The Group achieved above-average gains in Asia and South
America, in particular, but also within the North American
automobile market, which is on track for recovery following its
severe slump a year ago. Benefiting from an upturn in foreign
sales, the Aftermarket segment recorded year-on-year revenue
growth of 8.9% in the first quarter of 2010, taking its total to
EUR 26.8 (24.6) million.

Significant improvement in earnings performance despite one-off
charges
At 28.4%, the increase in cost of sales was less pronounced than
in the case of sales revenue, which grew by 40.9%. Alongside cost
reductions, more extensive utilization of production capacities
and new product ramp-ups proved to be the principal drivers.
Despite rising material prices, the gross profit margin increased
to 29.5% (22.6%), an increase compared to the figure of 28.8%
recorded in the preceding quarter. In aggregate, hedging relating
to alloy surcharges contained in prices charged for high-grade
steel had a positive effect on the Group's operating result in
the first quarter of 2010, equivalent to EUR 0.2 million.

Due to the partial-retirement scheme, which is a component of the
2010 collective wage agreement, the Group had to recognize
appropriate provisions for the entire contractual term up to the
end of March 2012; this resulted in a non-recurring increase in
staff costs of EUR 1.8 million in the first quarter of 2010. In
addition, provisions in connection with employee benefits agreed
for the years 2008 and 2009, totaling EUR 2.4 million, were
recognized as early as the first quarter of 2010. These two
exceptional items, in combination with the termination of short-
time work at the beginning of the year, contributed to higher
staff costs and therefore also affected the Group's operating
result.

The Group expended EUR 10.8 (9.4) million in research and
development, 14.9% more than in the same quarter a year ago.
Alongside the development of several new applications for
existing technologies, ElringKlinger focused in particular on the
expansion of its activities in the field of fuel cells and
batteries. In negotiating its first serial production contract
for cell connectors used in lithium-ion batteries, ElringKlinger
secured a key project within this area during the first quarter
of 2010.

Operating result benefits from higher capacity utilization
Earnings before interest, taxes, depreciation and amortization
(EBITDA) were up EUR 18.5 million on last year's result for the
first quarter, taking the total to EUR 41.7 (23.2) million. Owing
to the substantial investments seen in previous years,
depreciation rose by EUR 3.0 million to EUR 19.4 (16.4) million
in the first quarter of 2010.

Compared to the sluggish first quarter of 2009, rising sales,
together with the concomitant improvement in the utilization of
production capacities at most of the business units in the first
quarter of 2010 , led to a pronounced rise in operating profit by
EUR 19.7 million to EUR 23.4 (3.7) million which percentage-wise
was more pronounced than the increase in sales. Earnings before
interest and taxes (EBIT), including a total of EUR 1.1 million
in negative foreign currency effects, amounted to EUR 22.3 (6.8)
million. Thus, the EBIT margin rose to 12.2% (5.2%) in the first
quarter of 2010, despite the exceptional items outlined above.
Excluding the exceptional factors attributable to commodity price
hedging, higher partial-retirement provisions as well as amounts
provisioned for in connection with employee benefits, the EBIT
margin stood at 14.4%.

Net finance cost stood at minus EUR 4.5 (-0.3) million in the
first quarter of 2010. In this context, it should be noted that
the first quarter of 2009 had benefited from positive foreign
currency effects equivalent to EUR 3.1 million. While the Group's
net interest result improved slightly, the remeasurement at the
end of the reporting period of liabilities relating to the
financing of ElringKlinger's acquisition of the SEVEX Group,
Switzerland, produced finance cost of EUR 2.2 million. In total,
earnings before taxes rose by EUR 15.5 million year-on-year to
EUR 18.9 (3.4) million in the first quarter of 2010.

EUR 13.6 million in consolidated net income after minority
interests
Primarily due to the stronger earnings performance of
ElringKlinger companies with below-average tax rates, the income
tax rate fell to 25.5% (29.4%). On this basis, the ElringKlinger
Group generated net income of EUR 14.1 million in the first
quarter of 2010, compared to EUR 2.4 million in the same quarter
a year ago. After minority interests of EUR 0.5 (0.4) million,
net income (profit attributable to shareholders of ElringKlinger
AG) in the first quarter of 2010 amounted to EUR 13.6 (2.0)
million. This corresponded to earnings per share of EUR 0.24
(0.03).

Forecast for 2010 revised upwards
The gradual upturn in order intake, already evident since the
second quarter of 2009, continued during the first quarter.
Compared to a lackluster order intake in the first quarter of
2009, that was strongly affected by the economic crisis, order
intake for the first quarter of 2010 rose to EUR 200.5 (125.4)
million. Thus, the upward trend also remained intact in relation
to the fourth quarter of 2009 (EUR 173.0 million).

Based on the assumption that automobile markets will continue to
recover and that economic conditions will remain stable, and in
view of the positive performance of the first quarter of 2010,
the ElringKlinger Group has revised upwards its revenue and
earnings targets for the annual period as a whole. At present,
ElringKlinger is targeting a rise in sales revenue of 10 to 13%
(previously 7 to 10%). EBIT is to be expanded by 20 to 25%
(previously 12 to 15%), i.e. at a more pronounced rate than sales
revenue.

end of announcement euro adhoc
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ots Originaltext: ElringKlinger AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Stephan Haas

Telefon: +49(0)7123 724 631

E-Mail: stephan.haas@elringklinger.de

Branche: Automotive Equipment
ISIN: DE0007856023
WKN: 785602
Index: MDAX, Classic All Share, Prime All Share
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
Düsseldorf / free trade
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